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The landing of Indian IT companies in Mexico

The landing of Indian IT companies is a strong indicator of the value that Mexico represents for technology investment.

1 de septiembre del 2018

Monterrey, the capital of the northeastern Mexican state of Nuevo León, has historically been considered an industrial city. In the last few years, a major shift has begun to propel the region beyond the confines of physical industrialization and transform it into a knowledge city. In addition to the investments to support new Mexican startups, Information Technology (IT) organizations from India are finding subsidiaries in different cities of Mexico, such as Guadalajara, Hermosillo, Monterrey, among others.

Sasken, a software development company specializing in telecommunications, was the first Indian company to reach Mexico through its customer Texas Instruments. After that, Aricent, Infosys and Wipro opened new operation centers in the city and are all planning to expand their infrastructure thanks to steady business growth.

The landing of Indian IT companies is a strong indicator of the value Mexico represents for technology investment. Indeed, these enterprises have various interests in setting up new centers in Nuevo León’s capital. Their short-term objective is to provide quality services at lower prices to their clients in the USA and Canada. However, their long-term strategy includes supplying demand for software in emerging Mexican and Latin American markets. Indian companies believe that Mexico has strategic geographic advantages to access both markets. The nation “is a strategic nearshore location that provides more options to our many North American customers to serve their unique sourcing requirements,” says Scott Staples, president and co-CEO of MindTree IT Services.

However, the proximity of Mexico to the U.S. border is not the only reason why Indian companies favor Mexico. Murthy Rajashekar, Group Head of Wipro Monterrey, emphasized the fact that Monterrey's “good infrastructure, quality of life, and the presence of competent talent” were all taken into consideration when deciding on a city in which to locate their operations. Monterrey is considered by Indian companies as one of the safest cities in Mexico, with good universities and a population with strong technical and language skills. Furthermore, the opening of operations in Mexico enables Indian companies to establish economic links and cultural relations with emerging Latin American markets. In fact, some of these companies, like Infosys, already have important clients or prospects operating in Latin America.

During the trip to Bangalore, Rangel Sostmann emphasized the Tecnológico de Monterrey’s “Soft Landing” program offered to Indian companies. “(International) companies many times decide not to come (to Mexico) because they don’t know how to arrive.” Soft Landing program of the Tecnológico de Monterrey is an example of the facilities available in this region.

Indian IT companies are perceiving tangible benefits from establishing operations in Mexico. The associations Indian landing organizations have made with Mexican colleges, the "Soft Landing" program, the efforts made by the State of Nuevo León, Sonora and Jalisco to enhance the attractiveness of the cities for programming firms, and the natural geographical advantage position of being in closeness to North and South American markets will, without a doubt, attract more Indian organizations to Mexico in the years to come.

The phenomenon of Indian IT companies establishing operations in Mexico is a promising indicator of the trend toward the internationalization of the IT sector in the country. In today’s changing world, knowledge, and the processes to generate and manage it, have become key factors in creating competitive business advantage. The challenges facing such globalizing programs as MICK call for an expanded research agenda in the field of knowledge management. In this context, Mexico is positioning itself both as a creator and attractor of talent, and the proliferation of IT businesses will bring new economic, social and cultural benefits. Nevertheless, the path forward presents challenges and opportunities for both Indian and Mexican companies if this economic sector in Mexico is to achieve world-class status.

The world continues to flatten, unlocking Mexico's potential as a major business center and solidifying its role as a strategic location for technology innovators.

 

Is your company ready to expand to Latin American market? Mexico could be the perfect gateway. At Xipe, we can help you to analyze your options to start this process and get the most of it, contact us.

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